A Bright Guide to Interdealer Brokerage

Inter-dealer brokers are the ones on the trading floor shouting at the top of their voices, clutching phones to both ears and red in the face. But what do they actually do, and would this career be the right one for you? Read on to find out more.

 

What is it?

Inter-dealer brokers are the essential middlemen between one party who wants to buy a product on the markets for a certain price, and the party who wants to sell it. They facilitate the haggling process and charge a fee for doing so.

Why is it used?

Brokers are a little bit like an insurance comparison website in that instead of the client ringing up lots of banks to find out prices, they can call one person who’ll compare them for the client and have an answer straight away. 

Furthermore, the anonymity brokers can give clients is priceless and is the reason they still exist. Clients, who can be anything from hedge funds to pension funds, don’t want the market to know their trades until they’re complete. What’s more, many factors affect prices. A broker might be about to seal a deal when suddenly an external factor like a profit warning on a company will significantly change the market, then speed is of the essence to close profitable deals before it’s too late – hence all the shouting.

Why is it a good career?

It’s not a typical desk job, it’s incredibly intense and high octane. The challenge of balancing several deals at the same time is an addictive one, and all the more so for its atmosphere and speed. It’s also very transparent, your results will be plain to see and that makes it very meritocratic.

Who would enjoy it?

The type of graduate who would thrive in this arena is definitely someone who loves high pressure and quick decision-making. If you’re not comfortable getting your adrenaline up, this won’t be for you. It’s also incredibly people-focused, you’ll be constantly talking to people, cutting deals or entertaining clients. 

How to impress on an application

As it’s such a client-facing role you’ll boost your application if you emphasise your communication skills. Try to prove you’ve had to balance teams with conflicting priorities, or dealt with challenging customers successfully. The emotional intelligence required to do those types of tasks will transfer well to the trading floor. 

You’ll also need to prove you’re motivated by sealing deals, so try to choose work experiences where you get to negotiate deals with suppliers or clients. Or, show a love of haggling by visiting markets and seeing how big a discount you can get – that kind of proactivity will stand you in excellent stead for this competitive career.